German business rebound breaches gloom


Published — Saturday 24 November 2012

Last update 24 November 2012 2:24 am

| نسخة PDF Print News | A A

BERLIN: German business confidence halted a six-month slide to stage an unexpected rally in November, data suggested yesterday, despite a somber overall economic climate due to the euro zone crisis.
The head of the Ifo economic think tank, Hans-Werner Sinn, said that the business climate had brightened slightly after six falls in a row which had seen business confidence slump to a two-and-a-half-year low in October.
"Companies expressed slightly greater satisfaction with their current business situation," he said in a written statement.
"They were also far less pessimistic about future business developments. The German economy is holding up in the face of the euro crisis," he said.
Germany has the biggest economy in Europe and the strength of business activity there is critical to trade and activity in the debt-stricken euro zone, and also throughout the wider European Union.
European stocks markets steadied and the euro rallied after the German data emerged.
On Thursday, a key leading indicator, the Markit PMI composite index published in Brussels, put the index for euro zone private sector activity at 45.8 in November from 45.7 in October, the lowest since June 2009.
Analysts said that this pointed to an "alarming" slowdown and possibly that the euro zone would dig into recession in the fourth quarter of the year. 
But the news from Germany on Friday coincided with a slight lifting in France's industrial gloom.
French industrialists gained some confidence in November about their business outlook, according to the official statistics institute INSEE, after plunging in October into the deepest gloom since the middle of 2009.
However France's private sector activity fell in November for the ninth month in a row, albeit less than it had for three months, according to the Markit PMI leading indicator released on Thursday.
"Although the contraction of activity is slowing a bit in the French private sector in November, the new marked drop in new business shows a still fragile economy" in France, Markit economist Jack Kennedy said in a written statement.
France's economy has been stumbling along at almost zero growth for about a year but in the last quarter rallied to show a gain of 0.2 percent, the same level as in Germany where the economy had been resilient but has been hit by a slowdown in business activity.
Germany's economy slowed to 0.2 percent growth in the third quarter of 2012 as the euro zone crisis took its toll, final official data showed yesterday. That compared to growth of 0.5 percent in the first quarter and second-quarter growth of 0.3 percent.
The Ifo economic institute's closely watched business climate index rose to 101.4 points in November, back to its September level, from 100.0 points a month earlier, contrary to analysts' expectations.
Analysts surveyed by Dow Jones Newswires had anticipated the indicator slipping to 99.5 points.
However economists at Capital Economics saw no reason for overall optimism.
"The unexpected rise in November's German Ifo survey did little to alter the big picture of near-stagnation in the euro-zone's 'growth engine'," they said in a written note.
Christian Schulz, of Berenberg bank, was also cautious.
"Although the Ifo points in a better direction, a degree of caution is warranted," he wrote.
"Business confidence in the most important sector, manufacturing improved only slightly and stays negative on balance.
"The strongest increase was reported for the volatile wholesale trade sector, the only sector where optimists now outnumber pessimists," he added.
Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months.
The sub-index measuring current business also rose to 108.1 points in November, and the outlook sub-index rose to 95.2 points.
Unlike many of its neighbors, Germany has shown strong resistance to the debt crisis that has swept through the 17-country euro zone, relying on its powerful export motor to keep the economy humming.
However signs have appeared that Europe's top economy is starting to feel the pinch.
The Organization for Economic Cooperation and Development warned earlier in the month that the euro zone economy was slowing further, with the possible exception of Italy.

What's happening around Saudi Arabia

RIYADH: Security forces have arrested a Syrian man accused of plotting attacks and his Filipino accomplice in a raid on an illegal explosives factory in Riyadh, the Interior Ministry said, according to SPA.The Saudi Press Agency reported Saturday tha...
JEDDAH: Cyber security experts and researchers have confirmed that they have received many requests for help in dealing with extortion and blackmail.The cases were so serious that some of the young men had tried to commit suicide.Mohammed Al-Sariei,...
JEDDAH: For many sanitary workers, the Islamic greeting has become a way to tug at people’s hearts. The greeting is made in hopes of receiving a couple of riyals in exchange for cleaning the streets.Standing at traffic lights with their brooms, their...
JEDDAH: The streets of Mina are still unclean and littered with trash despite the fact that it has been seven days since the pilgrims departed.The Makkah municipality has warned pilgrim establishments not to dump their waste and has threatened them w...
JEDDAH: Camel owners are accusing “hidden hands” behind the campaign against camels, which has led to the deterioration of the animal market and deeply impacted their prices, alleging that government agencies are mainly supporting these parties.Owner...
JEDDAH: The Ministry of Labor created 1.5 million jobs for young Saudi men and women in 2014, a six percent rise from the previous year.This is according to Labor Minister Mofarrej Al-Haqbani, who said the ministry has been working on several measure...
DAMMAM: The Dammam chapter of the Indian Engineers Forum (IEF) recently celebrated 48th Annual Engineers Day.“The say is celebrated every year in India as Engineer’s Day to commemorate the birthday of the legendary engineer, Sir Mokshagundam Visvesva...
DAMMAM: Rumors are nearly as old as human history, but with the rise of the Internet, they have become ubiquitous. False rumors are especially troublesome; they impose real damage on individuals and institutions, and they are often used by enemies to...
RIYADH: The Education Ministry organized the National Unity Forum under the sponsorship of Jazan Gov. Prince Mohammed bin Nasser.“The forum engendered loyalty to the Kingdom and the Saudi leadership among the employees of the ministry,” Education Min...
JEDDAH: The bodies of the Mina stampede are being buried in separate graves after giving a bath and offering funeral prayers, the National Society for Human Rights (NSHR) of Makkah has said.“The bodies are not being buried in mass graves. They are be...
RIYADH: King Saud Medical City (KSMC) launched a campaign recently to thank the country’s security officers for keeping the country safe. “The campaign was launched as a way to express our gratitude to all the security officers who are serving the na...
RIYADH: The traffic department in the capital launched a campaign against badly maintained automobiles as part of its drive to limit accidents and control pollution, and seized 1,915 vehicles.The department said that 1,015 vehicles were seized for no...
AL-AHSA: The beautiful terrain and historical caves at the Al-Qara Mountain in Al-Ahsa beckoned citizens as well as expatriates during the Eid Al-Adha holidays.The mountain and its surroundings, including the oasis of palms, turned into a beehive of...
JEDDAH: The Foreign Ministers of Organization of Islamic Cooperation (OIC) member states recently condemned Israeli violations in Palestinian territories, calling the actions a violation of international law.The ministers passed a resolution confirmi...
RIYADH: Several subscribers of Saudi Electricity Company (SEC) in the northern part of the Saudi capital have complained that the company’s services went down for more than 11 hours earlier this week.An online publication reported that the services w...

Stay Connected